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PRINTER'S NO. 860
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
743
Session of
2021
INTRODUCED BY COSTA, FONTANA, BREWSTER, SCHWANK, L. WILLIAMS,
TARTAGLIONE AND CAPPELLETTI, JUNE 7, 2021
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, JUNE 7, 2021
AN ACT
Establishing the Landslide Insurance and Assistance Program
within the Department of Environmental Protection; providing
for related powers and duties of the Department of
Environmental Protection; establishing and providing for the
powers and duties of the Landslide Insurance and Assistance
Board; providing for duties of the Auditor General;
establishing the Landslide Insurance Fund and the Landslide
Assistance Fund; imposing a penalty; and making
appropriations.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Declaration of policy.
Section 103. Definitions.
Chapter 3. Landslide Insurance and Assistance Program
Section 301. Program goals.
Section 302. Board.
Section 303. Appeals.
Section 304. Landslide Insurance and Assistance Program.
Section 305. Board authority.
Section 306. Land-use controls and rate structure.
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Chapter 5. Landslide Insurance Fund
Section 501. Landslide Insurance Fund.
Section 502. Schedule of premiums.
Section 503. Surplus.
Section 504. Insurance program.
Section 505. Application for increase in insurance.
Section 506. Automatic inflation protection increase.
Section 507. Audit by Auditor General.
Section 508. Claims against insurance fund.
Section 509. Defenses against claims and procedure.
Section 510. Subrogation to rights of claimants.
Section 511. Insurance companies may cover risk.
Section 512. Escrow of premium payments.
Section 513. Properties in violation of State or local law.
Chapter 7. Mitigation Assistance
Section 701. Mitigation assistance.
Section 702. Landslide Assistance Fund.
Section 703. Construction permits.
Chapter 9. Program Administration and Funding
Section 901. Regulations.
Section 902. Board report.
Section 903. Board funding.
Section 904. Reimbursement.
Section 905. Appropriations.
Section 906. Cost of administration.
Section 907. Commissions.
Chapter 11. Miscellaneous Provisions
Section 1101. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
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CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Landslide
Insurance and Assistance Program Act.
Section 102. Declaration of policy.
The General Assembly finds and declares as follows:
(1) Geologists have studied with increasing concern the
underground movement of the geological formations in this
Commonwealth and its impeding effects on the vertical and
horizontal natural and manmade surfaces.
(2) Landslides and slope movement have historically been
the norm throughout most parts of this Commonwealth.
(3) Landslides and slope movement occur without regard
for municipal boundaries, ordinances, planning codes,
politics and economies, making it difficult for local
officials to deal effectively with the development and
implementation of methods and standards to control the
devastation these natural forces can cause.
(4) Landslides and slope movement have caused an
enormous amount of damage to homes and roadways in this
Commonwealth, particularly the southwestern region of the
State.
(5) Landslides and slope movement will continue to
plague southwestern Pennsylvania.
(6) Landslides affect every state in the nation, causing
an estimated $2 billion to $4 billion in damages per year.
(7) Landslide damage caused by flooding is not covered
by the National Flood Insurance Program.
(8) While landslide damage caused by mining practices is
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covered by the Coal and Clay Mine Subsidence Insurance Fund
and mudslide damage is covered by the National Flood
Insurance Program, other types of landslide damage are
usually not covered by insurance.
(9) Problems associated with landslide damage are
becoming more widespread.
(10) It would be to the advantage of residents of the
landslide-prone areas of this Commonwealth to form a common
bond to combat distress resulting from landslides.
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Assistance fund." The Landslide Assistance Fund established
under section 702.
"Board." The Landslide Insurance and Assistance Board
established under section 302.
"Department." The Department of Environmental Protection of
the Commonwealth.
"Extremely hazardous area." An area where all of the
following factors that contribute to landslides occur in the
same location:
(1) Steep slopes.
(2) Soils prone to landslides.
(3) Landslide features.
"Further review area." An area for which additional site-
specific review is needed based on a geological map or model
identifying the area as including a site prone to experience a
landslide.
"GIS." Geographic information systems.
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"Hazardous area." An area where one of the following factors
that contributes to landslides occurs:
(1) Steep slopes.
(2) Soils prone to landslides.
(3) Landslide features.
"Insurance fund." The Landslide Insurance Fund established
under section 501.
"Landslide." Any detached mass of soil, rock, earth or
debris that moves down a slope and is of sufficient size to
cause damage. The term includes sinkholes.
"Landslide features." The term includes rockfall areas,
creep, red beds and historic landslides.
"Mitigation." An activity relative to landslides that
prevents an emergency from occurring, reduces the likelihood of
an emergency occurring or lessens the damaging effects of
unavoidable emergencies.
"Mitigation plan." A plan designed by a municipality that
when implemented provides mitigation.
"Municipality." A city, borough, incorporated town, township
or home rule municipality.
"Program." The Landslide Insurance and Assistance Program
established under section 304.
CHAPTER 3
LANDSLIDE INSURANCE AND ASSISTANCE PROGRAM
Section 301. Program goals.
The goals of the program are as follows:
(1) To provide actuarially sound insurance coverage.
(2) To make policies issued under the program
universally available and competitively priced.
(3) To make use of the most effective scientific and
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technological advances available, including technology such
as GIS.
(4) To process claims promptly, fairly and consistently.
(5) To provide tools and incentives for landslide loss
reduction, including the assistance fund.
(6) To collaborate with other organizations that operate
in the public interest to assist in achieving program goals.
Section 302. Board.
(a) Board established.--The Landslide Insurance and
Assistance Board is established within the department.
(b) Members.--The board shall consist of the following
members:
(1) The Secretary of Community and Economic Development
or a designee.
(2) The Secretary of Conservation and Natural Resources
or a designee.
(3) The Secretary of Environmental Protection or a
designee.
(4) The Insurance Commissioner or a designee.
(5) The Secretary of Transportation or a designee.
(6) The Director of the Pennsylvania Emergency
Management Agency or a designee.
(7) The Executive Director of the Pennsylvania Housing
Finance Agency or a designee.
(8) An individual appointed by each of the following:
(i) The President pro tempore of the Senate.
(ii) The Minority Leader of the Senate.
(iii) The Speaker of the House of Representatives.
(iv) The Minority Leader of the House of
Representatives.
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(c) Chairperson.--The Secretary of Environmental Protection
or a designee shall serve as the chairperson of the board.
(d) Employees.--All employees of the board shall be employed
by and located in the department.
Section 303. Appeals.
Any party aggrieved by an action of the board shall have the
right to appeal in accordance with 2 Pa.C.S. (relating to
administrative law and procedure).
Section 304. Landslide Insurance and Assistance Program.
(a) Establishment.--The Landslide Insurance and Assistance
Program is established and shall be administered by the board.
(b) Program components.--The program shall consist of the
following components:
(1) A grant program.
(2) A revolving loan program.
(3) An insurance program.
(c) Purposes.--The grant program and the revolving loan
program are established for the primary purposes of mitigation
and repairing minor structural damage. The board shall employ
the grant program and the revolving loan program as tools to aid
in the success of the insurance fund.
Section 305. Board authority.
(a) Intergovernmental cooperation.--The board shall:
(1) Work closely with Federal, State and local agencies
and any other government agencies, including those of other
states, to accomplish program goals.
(2) Create and implement a Statewide landslide
mitigation plan that would encourage and support local
mitigation efforts.
(3) Investigate sites to define hazards.
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(4) Recommend legislation, regulations, ordinances and
zoning to mitigate slope instability contributed by
excavation and drainage.
(5) Work with local governments to evaluate risk
associated with certain homesite development.
(6) Share the most up-to-date geological surveys, in the
form of maps, GIS data or other useful forms, and related
information, free of charge to government agencies and
appropriate representatives of municipalities, and at a
reasonable cost to all other persons. Receipts under this
paragraph shall be deposited in the assistance fund.
(7) Inform the Department of Transportation which
highways are at greatest risk from landslides.
(8) Notify local governments in areas with the greatest
risk from landslides.
(9) Have the authority to consult, receive information
and enter into any agreements or other arrangements in order
to identify and publish information with respect to all
landslide-prone areas, establish or update landslide-risk
zone data and make estimates with respect to the rates of
probable landslide-caused loss for the various landslide-risk
zones for each of these areas.
(10) Publish any change to landslide insurance map
panels.
(11) Ensure that the program is consistent in landslide
control, landslide forecasting and landslide damage
prevention.
(b) Studies and investigations.--
(1) The board is authorized to request necessary studies
and investigations, utilizing to the maximum extent
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practicable the existing facilities and services of other
Federal and Commonwealth departments or agencies, local
governmental agencies and any other organizations, with
respect to the adequacy of State and local measures in
landslide-prone areas as to:
(i) Land management and use.
(ii) Landslide control.
(iii) Zoning.
(iv) Landslide damage prevention.
(2) The board may enter into any contracts, agreements
or other appropriate arrangements to carry out its authority
under this act. The studies and investigations shall include
the following:
(i) Laws.
(ii) Regulations.
(iii) Ordinances.
(iv) Zoning.
(v) Building codes.
(vi) Building permits.
(vii) Subdivision or other building restrictions.
(c) State and local measures.--On the basis of studies and
investigations under subsection (b) and any other information as
the board deems necessary, the board shall develop comprehensive
criteria designed to encourage, where necessary, the adoption of
adequate State and local measures which:
(1) Address, where appropriate, the development of land
which is exposed to landslide damage.
(2) Guide the development of proposed construction away
from locations which are threatened by landslide hazards.
(3) Assist in reducing damage caused by landslides.
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(4) Otherwise improve the long-range land management and
use of landslide-prone areas.
(d) Technical assistance.--The board shall work closely with
and provide any necessary technical assistance to State and
local governmental agencies to encourage the application of the
criteria and the adoption and enforcement of the measures under
this section.
Section 306. Land-use controls and rate structure.
Local governments may initiate land-use controls for the
benefit of their residents. The following shall apply:
(1) No new landslide insurance coverage shall be
provided to new construction without preapproval by an
appropriate local public body, which shall have the option of
adopting adequate land use and control measures with
effective enforcement provisions.
(2) A rating system shall be employed by the board as an
incentive for municipalities regarding landslide management.
(3) Rate structures shall provide incentives for
measures that reduce the risk of landslide damage and
evaluate the measures. The program shall provide incentives
in the form of credits on premium rates for landslide
insurance coverage in municipalities that the board
determines have adopted and enforced measures that reduce the
risk of landslide damage.
(4) The credits on premium rates for flood insurance
coverage shall be based on the estimated reduction in flood
and erosion damage risks resulting from the measures adopted
by the municipality under the program. If a municipality has
received mitigation or other assistance under the program,
the credits may be used in a manner determined by the board
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to recover the amount of assistance provided for the
municipality.
CHAPTER 5
LANDSLIDE INSURANCE FUND
Section 501. Landslide Insurance Fund.
(a) Establishment.--The Landslide Insurance Fund is
established as a separate fund in the Treasury Department. The
insurance fund shall be administered by the board for the
purpose of insuring subscribers against the damages to their
structures resulting from landslides if the damage is not
covered by other insurance programs or coverage.
(b) Administration.--The insurance fund shall be
administered by the board without liability on the part of the
Commonwealth beyond the amount of the insurance fund except as
provided under this act and shall be applied to the payment of
damages as described under subsection (a).
(c) State Treasurer as custodian of insurance fund.--The
State Treasurer shall be the custodian of the insurance fund,
and all disbursements from the insurance fund shall be paid at
the request of the board. For making payments without audit, the
State Treasurer shall not be under any liability. The State
Treasurer may deposit any portion of the insurance fund not
needed for immediate use as other State money is lawfully
deposited. The interest shall be placed to the credit of the
insurance fund.
Section 502. Schedule of premiums.
On or before July 1, 2022, and each year thereafter, the
board shall prepare and publish a schedule of premiums or rates
of insurance for subscribers. The schedule shall be printed and
distributed free of charge to any person upon application and
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shall be made available on the publicly accessible Internet
website of the department. Any subscriber may, at the
subscriber's option, pay to the insurance fund the amount of
premium appropriate and, upon payment of the premium, shall be
insured for the year for which the premium is paid. The
insurance shall cover all payments becoming due for which the
premium is paid. The premium shall be adequate to enable payment
of all sums, which may become due and payable under this act,
and adequate reserve sufficient to carry all policies and claims
to maturity. In establishing the premiums payable by any
subscriber, the board may take into account the condition of the
premises of the subscriber with respect to the possibility of
landslide damage as shown by the report of any inspector
appointed by the board. The board may change the amount of
premiums payable by any of the subscribers as circumstances may
require and the condition of the premises of the subscribers
with respect to the possibility of a landslide may justify. The
board may increase the premiums of any subscriber whose loss
experience warrants a change. The insurance of any subscriber
shall not be effective until the premium so fixed and determined
has been paid in full.
Section 503. Surplus.
The board shall set aside 5% of all premiums collected for
the creation of a surplus until the surplus is sufficiently
large to cover catastrophic hazard of all the subscribers to the
insurance fund and to guarantee the solvency of the insurance
fund. At such point, the board shall reevaluate the set-aside
and investment of the surplus and make a recommendation to the
General Assembly.
Section 504. Insurance program.
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(a) Application and certification.--Any owner of a structure
located within a landslide-prone region that desires to become a
subscriber to the insurance fund for the purpose of insuring a
structure in the region against damage from landslides shall
make a complete application as prescribed by the board and to
its agents or insurance producers. Upon receipt of an
application, the board shall make an investigation as may be
necessary if the application complies with the rules and
regulations of the board. Within 60 days after the request for
an application is received, the board shall issue a certificate
showing the acceptance of the application and the amount of
premium payable by the applicant for one, two or three years, as
the board may establish.
(b) Coverage premiums and requirements.--No insurance shall
become effective until the premium has been paid. All premiums
shall be made payable to the State Treasurer, and a receipt
shall be issued. The receipt for a premium, together with a
certificate of the board, shall be evidence that the applicant
has become a subscriber to the insurance fund and is insured
from the date of application. The following apply:
(1) The insurance may be subject to later reductions,
and premiums adjusted accordingly, if the board determines
that the amount of insurance coverage requested is in excess
of the current replacement cost of the structure or the
maximum amount of coverage established by the fund, whichever
is less.
(2) The insurance shall be void if, upon investigation
of the structure, the board determines that either landslide
damage occurred before the application was submitted or the
applicant is responsible for not allowing the board to
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inspect the structure within 60 days of receipt of the
application.
(3) The use of the most current science available to
identify landslide-prone areas shall be employed. If the
property is located in a further review area or within a
hazardous area, the property owner may be required to
complete a site assessment with a licensed professional,
which may include an onsite evaluation. The property owner
shall be responsible for the cost of the assessment. The
assessment may also be required before a local government
accepts an application for a development permit.
(4) Notwithstanding any other provision of law, any
structure repaired or restored to its original condition with
money from the insurance fund shall not be eligible for any
other disaster relief assistance from programs administered
by the board that would duplicate costs and damages covered
by insurance under this program or another insurance source.
(5) In order to assist insurance producers and potential
policyholders in identifying structures that could be at risk
from landslides, the board shall transmit notice to the
Legislative Reference Bureau for publication in the
Pennsylvania Bulletin a list of areas in this Commonwealth
that are believed to be at risk for landslide damage and any
update of the list.
(c) Penalty.--A person who knowingly furnishes or makes any
false certificate, application or statement required under this
section commits a misdemeanor and shall, upon conviction, be
sentenced to pay a fine of not more than $2,500 or to
imprisonment for not more than one year, or both.
Section 505. Application for increase in insurance.
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Additions in the amount of insurance are subject to the same
standards as initial applications.
Section 506. Automatic inflation protection increase.
The board shall make available to all subscribers, that
includes an additional premium amount, an annual inflation
protection option on the anniversary date of each policy issued
only if the total insurance remains at or under the value of the
structure itself. An inflation protection increase shall not be
subject to a reinspection of the structure.
Section 507. Audit by Auditor General.
The Auditor General shall, at least once each year, make a
complete examination and audit of the insurance fund, including
all receipts and expenditures, cash on hand, investments and
property held representing cash or cash disbursements. For these
purposes, the Auditor General is authorized to employ agents and
staff as the Auditor General may deem necessary. The expense
incurred in making the examination and audit shall be certified
to the insurance fund by the Auditor General and shall be paid
from the program.
Section 508. Claims against insurance fund.
A subscriber to the insurance fund must file with the board a
true statement of the subscriber's claim for any landslide
damage and shall give to the board an opportunity to investigate
and to determine whether the board will pay the claim.
Section 509. Defenses against claims and procedure.
In every case where a claim is made against the insurance
fund, the insurance fund shall be entitled to every defense
against the claim under the policy and shall be subrogated to
every right of the subscriber arising out of accidents against
any third persons. The insurance fund may, in the name of the
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insurance fund, sue or be sued to enforce any right given
against or to a subscriber or other persons under this act.
Section 510. Subrogation to rights of claimants.
Nothing in this act shall relieve any person, partnership or
corporation otherwise liable from any liability for damages
sustained by a subscriber. The insurance fund shall be
subrogated to the rights of any property owner's insurance under
this act.
Section 511. Insurance companies may cover risk.
Any insurance company may issue policies covering the type of
risk provided for under this chapter subject to the prior
approval of the Insurance Commissioner as to policy form and
rates.
Section 512. Escrow of premium payments.
Mortgage lenders shall escrow the landslide insurance premium
payments if they offer the purchase of the insurance.
Section 513. Properties in violation of State or local law.
No new landslide insurance coverage shall be provided for any
property which the board finds has been declared by a State or
local zoning authority or other authorized public body to be in
violation of State or local laws, regulations or ordinances
which are intended to discourage or otherwise restrict land
development or occupancy in landslide-prone areas.
CHAPTER 7
MITIGATION ASSISTANCE
Section 701. Mitigation assistance.
(a) Financial assistance generally.--The board shall carry
out a program to provide financial assistance to municipalities
and individuals for planning and carrying out activities
designed to reduce the risk of landslide damage to structures
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covered under contracts for landslide insurance. Financial
assistance may be made available to municipalities and
individuals in the form of grants or revolving loans for the
carrying out of mitigation activities. Loans shall carry an
interest rate of no more than 3%.
(b) Grants.--The board may make grants under this section to
municipalities to assist in developing mitigation plans.
(c) Eligibility.--To be eligible to receive financial
assistance, a municipality shall develop a mitigation plan that
describes the mitigation activities to be carried out with
assistance provided under this section. The mitigation plan must
be consistent with the criteria established by the board and
must provide protection against landslide losses to structures
for which contracts for flood insurance are available under this
act. The mitigation plan shall be consistent with a
comprehensive strategy for mitigation activities for the area
affected by the mitigation plan that has been adopted by the
municipality following a public hearing.
(d) Procedure.--The board shall notify a municipality
submitting a mitigation plan of the approval or disapproval of
the plan not later than 120 days after submission of the plan.
If the board does not approve a mitigation plan submitted under
this section, the board shall notify in writing the municipality
submitting the plan of the reasons for the disapproval.
(e) Limitation.--Amounts provided under this section may be
used only for mitigation activities specified in a mitigation
plan approved by the board. The board may approve only
mitigation plans that specify mitigation activities that are
technically feasible and cost effective and that are cost
beneficial under Chapter 5.
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(f) Approval.--The board shall approve funding for
mitigation plans based on criteria that include:
(1) Criteria under subsection (e).
(2) Proposed activities to address repetitive loss
structures and structures that have incurred substantial
damage.
(g) Matching funds.--The board may require a municipality to
match grant funds.
(h) Oversight.--The board shall conduct oversight of
recipients of mitigation assistance to ensure that the
assistance is used in compliance with the approved mitigation
plans of the recipients and that any matching fund requirements
are fulfilled.
(i) Failure to comply.--If the board determines that a
municipality that has received mitigation assistance has not
carried out the mitigation activities as set forth in the
mitigation plan or has not secured required matching funds, the
board shall recapture any unexpended amounts and redeposit the
amounts in the assistance fund.
Section 702. Landslide Assistance Fund.
The Landslide Assistance Fund is established as a restricted
account in the Treasury Department. The assistance fund shall be
administered by the board and shall be comprised of money
appropriated for purposes of this chapter. All money in the
assistance fund and any accrued interest is appropriated to the
board on a continuing basis to carry out the provisions of this
chapter.
Section 703. Construction permits.
No Commonwealth department or agency shall approve any
financial assistance for the acquisition of land for
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construction purposes in any area that has been identified by
the board as an extremely hazardous zone without approval to
proceed by the board based on the results of a risk assessment.
CHAPTER 9
PROGRAM ADMINISTRATION AND FUNDING
Section 901. Regulations.
The board may promulgate rules and regulations and establish
other conditions of the policies as it deems just and expedient
in keeping with the fulfillment of the purposes of this act,
including reasonable classification of risks eligible for
coverage under this act, limits of coverage and rules covering
the adjustment and settlement of claims.
Section 902. Board report.
The board shall make an annual report on the program and on
the experience with landslide insurance sales through producers
to the General Assembly. Each report shall include mitigation
efforts, an analysis of the cost-effectiveness of the program,
accomplishments or shortcomings of the program and
recommendations for legislation regarding the program.
Section 903. Board funding.
The board shall be funded by the General Assembly through an
appropriation of money to the board until such time as the
insurance fund and assistance fund are deemed self-sufficient by
the General Assembly.
Section 904. Reimbursement.
The board shall reimburse any Commonwealth departments or
agencies for agreed-upon costs of services that aid in
administering the program.
Section 905. Appropriations.
(a) Insurance fund.--The sum of $2,500,000, or as much
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thereof as may be necessary, is appropriated to the Landslide
Insurance Fund for the fiscal year July 1, 2021, through June
30, 2022.
(b) Assistance fund.--The sum of $2,500,000, or as much
thereof as may be necessary, is appropriated to the Landslide
Assistance Fund for the fiscal year July 1, 2021, through June
30, 2022.
(c) Board.--Money in the insurance fund and in the
assistance fund is appropriated to the board in such amounts as
may be determined annually by the Governor to be used for the
specified purposes of this act.
(d) Additional appropriations.--If, upon completion of the
annual examination and audit, it is determined that the total
asset value of either the insurance fund or assistance fund is
less than $2,500,000, any additional sum as may be necessary to
increase the total asset value of the insurance fund or the
insurance fund and the assistance fund to $2,500,000 shall be
appropriated.
Section 906. Cost of administration.
The board shall keep an accurate account of money paid in
premiums by the subscribers and disbursements on account of
damages to premises. If, at the expiration of any year, there is
a balance remaining after deducting the disbursements, the
unearned premiums on undetermined risks and the percentage of
premiums paid or payable to create or maintain the surplus
provided under this act, and after setting aside an adequate
reserve, the board may determine to allocate to the cost of
administering the insurance fund.
Section 907. Commissions.
Money from the insurance fund shall be available to pay a
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one-time commission, as determined by the board, to insurance
producers who forward applications for landslide insurance to
the board if a policy is issued pursuant to an application
submitted by an insurance producer. The amount of the commission
shall be determined by the board on an annual basis.
CHAPTER 11
MISCELLANEOUS PROVISIONS
Section 1101. Effective date.
This act shall take effect July 1, 2021, or immediately,
whichever is later.
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